All posts in category spending

Thanks to rising fees associated with using plastic, now more than ever, cash is king.

Credit-card issuers are scrambling to change annual fees, interest rates on existing balances and over-limit fees before credit-card reforms take effect in February. The changes have resulted in a new wave of fees for consumers and merchants who use and accept credit cards — including (but certainly not limited to) charges for processing payments, for paying bills by phone, for enrolling in auto-pay services and for late payments.

So paying with cash can help you avoid some fees. And it might even help you negotiate lower prices for all kinds of items.

For big-ticket purchases, such as cars and homes, putting down more cash has always helped people save on fees and interest. Now you may be able to score an additional win, as some merchants are willing to lower the base price for cash payers. That’s especially true with hard-hit industries like U.S. auto makers with gluts of vehicles sitting on lots. Even for smaller purchases, like flat-screen TVs or laptops, the money you save by paying with cash may be significant.

My boyfriend’s moving in, which is thrilling but a little scary. And I’m not just nervous about having his sweatsocks lying around. The financial issues that cohabitating couples face can be just as complicated as those of married pairs, if not more so.

Many people are buying the new Apple iPhone 3G S today. Right before I eagerly bought mine, I was faced with the age-old question of gadgetry: Did I want to buy an extended warranty?

Extended warranties, or extended-service contracts, are essentially insurance policies for products. New findings coming out in the forthcoming Journal of Consumer Research offer some insight into what consumers do and should do when it comes to shelling out for warranties.

Prof. Tao Chen, assistant professor of marketing at the University of Maryland’s Smith School of Business, dove into purchase histories of 604 households from November 2003 to October 2004. Although the data she and her colleagues collected doesn’t reflect the rise of the smartphone, she found that 31% of consumers did purchase an extended-service contract during that time for one thing or another. The average price of products purchased was $340.09 and the average price of the service contracts was $59.25.

In Prof. Chen’s study, although a third of consumers bought extended-service contracts, only 8% used them at least once. She said that many of those who bought the contract but didn’t use it defended their choice by claiming it gave them peace of mind.

Consumer advocates consistently argue against buying extended-service contracts, calling them money pits. If you use your credit card for purchases, you might have insurance on purchases that you don’t realize….

Summer vacation season is here, but we’re spending less on travel. A recent tourism outlook from Visa found that, between January and March, U.S. travelers spent $9.3 billion less abroad than they did over the same period last year.

Likewise, spending by international visitors to the U.S. dropped 14% to $11 billion over the same period.

Americans are still interested in going abroad, but Visa found that 83% are changing their travel plans because of the economy — either deciding to take trips at off-peak times or to stay closer to home.

Yes, wedding season is here. And this year, people may need to skip ceremonies to save money. (See here for some budgeting tips for the happy couple.) Here’s some advice on graceful and frugal ways to cope:
It’s OK to say no: A wedding invitation doesn’t mean you must break open your piggy bank and haul yourself to Tulsa. The bride and groom usually pay per guest, so in some ways you do them a favor by declining. Try to make a rule about how far you’re willing to travel (nothing over a three-hour drive, say, unless you can carpool or use frequent flier miles) or who you’re willing to shell out for (best friend, yes; your boyfriend’s second cousin, whom even he’s never met, not so much).

If there’s room on the RSVP card, enclose a note apologizing for missing the special day. You can mention the finance factor or follow up with a phone call explaining your circumstances.

At least that’s what everyone says. But it doesn’t have to be that way. While there are certain places where parents shouldn’t cut corners -– car seats, health care or anything that keeps kids safe -– plenty of other expenses can be trimmed back.

Accounting for reduced income, increased medical insurance, support services like lactation consultants and sitters, parents can spends an extra $30,700 in a new child’s first year, according to a 2007 survey by parenting site The Bump. Ouch.

That’s what I’ve found. I recently saved over $250 using one of Google’s less-chatted-about features.

In 2002, Google introduced Froogle, the search engine’s take on online comparison shopping. Google took the punny name away in 2007, but the site continues to add features to Google Product Search, the current version of Froogle.

Here’s how it works: You simply punch in a product into Google. Or you can go to Google Product Search‘s landing page. Type in what you’re looking for (in my case, “Apple iPod nano”), and out churns results showing the price ranges. Click on the “compare prices” button to the right of the search result …

A few weeks ago, The Wallet wrote about BuyTimeWarnerCable.com – separate from TimeWarnerCable.com – a Web site run by an “e-tailer” company which charged customers a $9.99 processing fee for calling to discuss cable service options and connecting their call to Time Warner.

Since then, Time Warner Cable has asked the company, Saveology.com, to cease charging the fee to its customers, who would not be charged if they called Time Warner Cable directly.

“It’s important to Time Warner Cable that our customers get the best value possible when purchasing our services and in that effort we asked Saveology to waive this fee for our customers,” said Alex Dudley, a spokesman for Time Warner Cable.

One of the ongoing challenges for consumers who consult recommendation sites and Web sites to make purchasing decisions is knowing where those recommendations and information come from.

As I wrote in my Family Money column today, the cell-phone industry has been aggressive in marketing pre-paid phone service, or service you buy in advance, as opposed to contract plans, where you pay after you’ve used your minutes. Several groups have publicly criticized the expense of contract plans, touting instead the advantages of pre-paid plans.

In November, for instance, the Telecommunications Research and Action Center recommended five ways to cut your cellphone bill. No. 1 was to switch one or all of your phones to a pre-paid service from a contract. No. 2: Dump your landline—and switch to a pre-paid phone.

Tough times require tough measures. One of the most repeated bits of personal-finance advice is that no matter how bad the economy gets, “keep contributing to your 401(k).” But as times get harder, some families facing financial problems may feel the need to reconsider the conventional wisdom.

David Hefty, an Auburn, Ind., financial adviser, says suspending contributions may make sense for families with no financial plan in place to cope with emergencies, such as a job loss, that could prevent them from meeting monthly expenses.

Broomfield, Colo., financial adviser Judy McNary last year counseled a family of five to temporarily stop their 401(k) contribution and pay down debt instead. She says their circumstances justified the extraordinary action…